The World: Emerging Africa gears up to join the world stage

Little more than a year after becoming the newest member of South
Africa's advertising diaspora, Mike Abel is heading home to rejoin an
agency scene where he's long been a familiar figure to lead the latest
phase of M&C Saatchi's global ambition.

Under the direction of Abel, formerly the chief operating officer of
Ogilvy South Africa, the country's biggest agency, and, more recently,
the head of M&C Saatchi's Australian operation, the UK-based group will
set up in Johannesburg and Cape Town.

In doing so, it becomes the latest network to recognise the importance
of being represented in what isn't only Africa's richest nation but the
gateway to a continent on the verge of an economic awakening.

Meanwhile, there's the prospect of next summer's World Cup, hosted by
South Africa, fuelling national pride and providing an economic fillip
from which the country's marketing communications industry hopes to
benefit.

"When it comes to advertising, Africa is the forgotten continent," Moray
MacLennan, the M&C Saatchi worldwide chairman, says. "We've forgotten
what an important emerging market it is."

It's also one with enormous potential that can largely be serviced out
of South Africa. To the north lies Nigeria, a country of 120 million
people and oil revenues to drive its growth. And what of Zimbabwe when
it finally emerges from the regime of Robert Mugabe, the latest in a
long line of despotic and incompetent leaders who have stifled the
continent's economic progress for half a century?

"A lot of clients are now seeing Africa in general - and South Africa in
particular - as a place to look at rather than run away from," John
Hunt, one of the founders of TBWA\Hunt\Lascaris in Johannesburg, says.
"They no longer see us as the 'doom and gloom' continent. They're now
saying: 'This is where we can make a buck.'"

Graham Warsop, the UK-born group chairman of The Jupiter Drawing Room,
South Africa's largest homegrown agency in which WPP has a 49 per cent
stake, agrees: "This country is the powerhouse for the whole Southern
Africa region. It's growing in strategic importance for agency networks
and for advertisers."

Its emergence won't happen overnight. South Africa remains what Abel
calls "a mesh of the First and Third Worlds". More than half of adults
have a mobile phone, presenting a huge opportunity for advertisers - but
almost half the homes still lack piped water.

This, coupled with the country's turbulent history, makes it
understandable that South Africa's journey towards prosperity remains a
faltering one. Corruption persists both inside and outside government
and there's an ongoing talent shortage. Agencies continue having their
best people poached by rivals abroad but find it hard replacing them
with good local staff. This is a legacy of the apartheid years when the
black community was poorly educated. Even those few who emerge with
university degrees find client-side jobs more appealing than the poor
starting salaries most agencies offer.

"Paucity of talent is a major problem for us," Glen Lomas, the DDB South
Africa chief executive, admits. "We're at the wrong end of the continent
and although our cities are large, they can't compete with London, New
York or Paris."

On the plus side, the consequences of having to work with an apartheid
system described by Hunt as "Orwellian in its absurdity" have gone for
good.

Sixteen years after the collapse of apartheid, it's hard to imagine what
it was like for agencies having to work within its constraints. There
were two state TV channels - one for blacks, the other for whites. No
black people could appear in commercials on the white channel and
vice-versa.

Kate Robertson, the Euro RSCG UK group chairman, who began her agency
career as an account executive at Lintas and JWT in Johannesburg,
recalls how Unilever began rocking the boat with ads that mixed blacks
and whites: "It created a hell of a fuss."

Fast-forward to 2009 and the scene is much changed. For a start, there's
been a dramatic transformation in the structure of agencies, which, in
common with other companies, must be at least 26 per cent owned by black
stockholders, a move that's been reflected in a better balance of black
staff in companies that were previously white bastions.

What's more, there's an emerging black middle class. Data from the
market researcher TGI shows rapid growth in the number of black South
Africans at the upper end of its living standards measure. They now
account for 10 per cent of the country's urban population.

Simultaneously, brands have been piling into South Africa. In the 80s,
consumers had just four beers from which to choose. Now there are around
30. They are being joined by luxury goods manufacturers alerted to the
fact that the country is becoming more cosmopolitan with the arrival of
more Europeans, particularly from the UK and Germany.

It's all grist to the mill for South African agencies. Even the largest
of them are heavily dependent on domestic business because margins are
often insufficient on their internationally aligned accounts.

"Brands are very important to South Africans, whatever their colour,"
Aubrey Malden, a partner at Johannesburg's Forensic Marketing, explains.
"The trade embargos of the apartheid years meant that they saw very few.
Now they love the choice."

Whether or not this trend is ushering in higher creative standards is an
open question. For a country that accounts for just 0.6 per cent of the
worldwide adspend, South African agencies punch above their weight at
international awards. Indeed, they took three gold, three silver and
seven bronze Lions at this year's Cannes festival.

Some observers see a distinct South African creative style emerging that
no longer takes its cue from the UK. "Big emotive blockbuster
advertising still works a treat in South Africa," Abel says. However,
Matthew Bull, the founder of South Africa's Lowe Bull, thinks it lacks
the adventure it had in the years immediately after the end of
apartheid.

A major obstacle to progress has been the lack of a credible broadband
system - described as "pathetic" by one agency boss - which has
prevented digital from being properly exploited by marketers.

"I don't think our advertising has a clear personality yet but the World
Cup might help define it a bit more clearly," Keith Shipley, the chief
executive of Network BBDO in Cape Town, suggests.

That and much more is expected from next year's footballing
extravaganza, whose marketing and chief commercial officer is Derek
Carstens, a former Ogilvy senior executive who has been seconded from
his role as the brand director at the First National Bank of South
Africa.

The big question is what the country will do once it has the ball at its
feet. Nobody is quite sure. "A lot of the money being spent by the
advertising and media industries will fall away the following year,"
Bull says. "But it will allow the business to invest for the long
term."

- 87% of South African homes have electricity and 72 per cent have
refrigerators.

- Six out of ten South African adults have access to a mobile phone,
either owning, renting or using one.

- Income levels are improving with significantly fewer people now in the
two lowest income brackets.

- More than 80 per cent of South African homes have TV sets.

- Almost 45 per cent of South African homes have DVD players.

- 47% of all South Africans over 16 read a newspaper. Total newspaper
readership now stands at more than 14.8 million.

- Daily newspapers have a total readership of more than nine million.
The Daily Sun is set to hit a five million readership figure. The
Sowetan has significantly grown its readership to more than two
million.

- Almost 40 per cent of South African adults read magazines. Total
magazine readership is more than 12.2 million.

- 29m South Africans or 93.5 per cent of the adult population listen to
radio.